OSG v. Ayala Land Inc.

GR No. 177056 – Sept 18, 2009

FACTS:

Respondents operate or lease out shopping malls that have parking facilities. The people that use said facilities are required to pay parking fees by the respondents. Senate committees conducted an investigation to determine the legality of said practice which the same found to be against the National Building Code. Respondents then received an information from various government agencies enjoining them from collecting parking fees and later a civil case against them. Respondents argued that the same constitutes undue taking of private property. OSG argues that the same is implemented in view of public welfare more specifically to ease traffic congestion. The RTC ruled in favor of the respondents. Hence petition for certiorari.

ISSUE:

Whether or not the respondents are obligated to provide for free parking to its consumers and the public.

RULING:

No. Respondents are not obligated to provide for free parking to the people.

Article 1158 of the Civil Code provides that “Obligations derived from law are not presumed. Only those expressly determined in this Code or in special laws are demandable, and shall be regulated by the precepts of the law which establishes them; and as to what has not been foreseen, by the provisions of this Book”.

The court does not agree to the petitioner’s reliance on the National Building Code as the same does not expressly provide that respondents are required to provide free parking to the public. Moreover, the court holds that the code regulates buildings and not traffic congestion. Police power is a power to regulate but not to confiscate. The OSG’s contention is a deprivation of private property and falls under eminent domain which requires just compensation. Thus, the RTC decision is affirmed and petition is dismissed for lack of merit.